KOTA KINABALU (Sept 24): Sabah state government will not allow unvetted carbon market projects to be rushed to market or traded on speculation despite the immense opportunities in the sector.

Chief Minister Datuk Seri Hajiji Noor stressed that the state government will protect Sabah’s reputation and brand through strong regulatory discipline.

He said poorly designed projects, overstated climate claims, undervalued resources and the exclusion of native communities will undermine investor confidence in Sabah's carbon credits.

“It is therefore in Sabah’s commercial interest to uphold the highest standards of environmental, social, financial, and governance integrity. Buyers will demand full transparency,” he said at the Sabah Carbon Market Forum: Unlocking Carbon Market Opportunities here Thursday.

Sabah Deputy Chief Minister II cum State Finance Minister Datuk Seri Masidi Manjun delivered his speech.

Hajiji said laws like the Sabah Climate Change and Carbon Governance Enactment 2025 legally recognise the state government’s ownership of carbon rights and set clear rules for carbon-related activities, including project approval and credit trading.

“The Sabah Climate Change Action Council (SCCAC) will oversee the state’s climate policy, prepare the state carbon budget for ministerial approval and gazettement, and coordinate efforts between state and federal agencies.

“The Sabah Climate Registry and Inventory Centre will provide technical and operational support to the SCCAC. Together, this framework is intended to offer investors a transparent, coordinated regulatory gateway for project approvals and registration of carbon rights,” he said.

He added that Sabah has Malaysia's first nature-based verified carbon credit initiative through the Kuamut Rainforest Conservation Project, which spans some 83,381 hectares (ha) of the state’s rich lowland and hill forests.

The project, expected to reduce carbon dioxide (CO2) emissions by about 800,000 tonnes, has set the benchmark for future initiatives. BeZero Carbon, the global carbon credit ratings agency, rated the project best-in-class.

The chief minister said the state government is also developing a diversified portfolio of carbon assets across key economic sectors, including the blue economy, agriculture, renewable energy and green technology, as well as carbon capture and storage.

Under the blue economy sector, Hajiji said Sabah has the largest continuous mangrove area of more than 340,000 ha in Malaysia. Sabah has strong potential to become a regional leader in the sector through marine biotechnology, sustainable aquaculture, and marine ecosystem-based tourism.

In agriculture, Sabah’s oil palm industry covers nearly 1.5 million ha, offering significant opportunities for methane capture and other climate mitigation initiatives using agricultural waste.

For the renewable energy and green technology sector, the state government will continue expanding solar, hydropower, biomass, and biogas to provide reliable, accessible, and affordable energy guided by the Sabah Energy Roadmap and Master Plan 2040.

“Sabah aims to increase the share of renewable electricity by 2030 through solar, hydropower, and biomass projects,” he said.

In the carbon capture and storage sector, Hajiji said Sabah’s offshore geological basins, together with its maritime frontier, offer long-term potential for geological carbon storage and position Sabah as a nationally significant industrial storage hub serving the region.

Almost 30% of Sabah’s landmass is designated totally protected areas, contributing to Malaysia’s biodiversity commitments and the 2030 global conservation target under the Kunming-Montreal Global Biodiversity Framework. This places the state prominently on the global conservation map, he said.

“Sabah is also Malaysia’s primary net carbon sink, or carbon-negative state, based on greenhouse gas inventory data. Our extensive forest cover strengthens Malaysia’s overall carbon absorption capacity of roughly 36%.

“Through inclusive forest management, created in partnership with local communities, we strive to balance environmental conservation with the socio-economic wellbeing of our people. Sabah’s identity and future are deeply rooted in our natural heritage,” he said.

Uploaded by Magessan Varatharaja